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On Tuesday, BofA Securities analyst Bryan Spillane maintained a positive outlook on Coca-Cola (NYSE:KO) shares, reiterating a Buy rating and a price target of $77.00. The beverage giant, currently valued at $310 billion, maintains a "GOOD" financial health score according to InvestingPro analysis. Spillane highlighted Coca-Cola’s first-quarter performance, which surpassed expectations with organic sales growth of 6%, outpacing both BofA Securities’ and consensus estimates of 3.8% and 4.7%, respectively. The growth was primarily driven by a 5-point contribution from pricing, with concentrate volume adding 1 point, compared to BofA’s forecast of 3.4% and 0.4% year-over-year.
Coca-Cola also reported a 2% increase in unit case volume growth, exceeding BofA’s estimate of 1.3%. Adjusted operating profit reached $3.79 billion, a 4.5% increase above BofA’s expectations, with an operating margin of 33.8%, which was 100 basis points higher than anticipated despite a 6% foreign exchange drag on operating profit. The company maintains impressive gross profit margins of 61% and has raised its dividend for 54 consecutive years, currently offering a yield of 2.84%. For deeper insights into Coca-Cola’s financial metrics and access to comprehensive Pro Research Reports covering 1,400+ stocks, consider subscribing to InvestingPro. The company saw notable organic performance in the Asia Pacific region, which was 4 points higher than BofA’s estimates, and in Latin America and North America, both exceeding BofA’s expectations by 3 points.
For the full year 2025, Coca-Cola has reiterated its outlook, expecting organic sales growth of 5-6%, with BofA’s estimate slightly lower at 4.9% and the Street’s at 5.7%. Adjusted EPS growth is projected at 2-3%. The updated guidance now assumes a reduced foreign exchange impact of 5-6 points to EPS, an improvement of 100 basis points from the previous guidance issued on February 10th. The guidance continues to imply a comparable EPS of $2.94-$2.97, in line with BofA’s and VisibleAlpha’s consensus of $2.95/$2.96.
Furthermore, Coca-Cola anticipates a full-year tax rate of 20.8%, excluding litigation impacts, and has not provided further updates on the ongoing case. The company’s reaffirmed FY25 guidance reflects confidence in its performance, considering the better-than-expected organic sales exit rate in the first quarter, with second-quarter guidance accounting for the anticipated foreign exchange impact on sales and EPS. With a strong YTD return of 16.16% and analysts maintaining a bullish consensus, the stock appears slightly overvalued according to InvestingPro’s Fair Value calculations, with analyst price targets ranging from $59.60 to $85.00.
In other recent news, Coca-Cola reported its first-quarter earnings for 2025, showing a slight beat on earnings per share (EPS) but a miss on revenue expectations. The company posted an EPS of $0.73, exceeding the forecast of $0.72, while revenue of $11.1 billion fell short of the anticipated $11.2 billion. Despite these results, Coca-Cola reaffirmed its 2025 guidance, projecting organic revenue growth of 5-6% and comparable currency-neutral EPS growth of 7-9%. Barclays (LON:BARC) maintained an Overweight rating on Coca-Cola with a $73 price target, expressing confidence despite a slight downward revision in the company’s full-year EPS forecast on a constant currency basis. Meanwhile, Goldman Sachs reiterated its Neutral rating with a $65 target, citing Coca-Cola’s ongoing legal battles with the Internal Revenue Service (IRS) and potential tax liabilities as a significant concern. Coca-Cola is facing a dispute with the IRS, with potential combined tax and interest liabilities estimated at approximately $12 billion by the end of 2024. Additionally, Coca-Cola’s North American business experienced softer volume growth, though it was offset by a robust price and product mix, while strong performance was noted in Asia Pacific, particularly in India and China.
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